Remuneration Policy in a Banking Corporation

Bank of Israel
Banking Supervision Department
Policy and Regulation Division
1
November 13, 2018
Circular Number C-06-2580
To:
Banking corporations and credit card companies Issue: Remuneration Policy in a Banking Corporation (Proper Conduct of Banking Business Directive no. 301A) Introduction

1. In recent years, the importance of recruiting and retaining key employees, primarily
   in technology, arose in view of the changes occurring in the banking system and its activity environment. As such, this directive was amended so as to allow granting retention bonuses to key employees who are not officeholders.
2. After consultation with the Advisory Committee on Banking Business Affairs, and
   with the consent of the Governor, I have amended this Directive. The update to the directive
3. Other remuneration (Section 15)
   Section 15(a) will be amended and subsection (2), “Retention bonus for key
   employee who is not an “officeholder” as defined in the Companies Law”, will be added. Explanation
   Section 15(a) prohibits the granting of essentially variable remuneration such as a
   retention bonus, which is not stipulated on performance. Subsection (2) differentiates a key employee who is not an office holder from this general rule. A clarification was added to the FAQ file for the implementation of this directive regarding the rules that apply to a bonus of this type. Effective date
4. This update goes into effect with the publication of this circular.
   Update of file
5. Update pages for the Proper Conduct of Banking Business Directive file are attached.
   Following are the provisions of the update:

Bank of Israel
Banking Supervision Department
Policy and Regulation Division
2
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(9/16) [3] 301A-1-11 (11/18) [4] 301A-1-11 Sincerely, Dr. Hedva Ber Supervisor of Banks